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Africa

Duty-free under duress: Kenya's trade with the EU

Despite the presence of 'outreach guests' from Africa at the G7 summit in Bavaria, relations between Africa and Europe can be acrimonious. Kenyans accused the EU of using 'blackmail' to implement a recent trade deal.

Cut flowers are a major Kenyan export and agriculture accounts for a quarter of GDP

Talks on a European Partnership Agreement between the 28-nation European Union (EU) and the East African Community (EAC) - Kenya, Rwanda, Burundi, Tanzania and Uganda - lasted ten long years.

A deal was reached in October 2014 and four EAC countries committed themselves to gradually opening up their markets to EU exports in return for continued exemption from EU customs duty.

Initially, Kenya refused to sign the deal.

On the outskirts of Nairobi, Goedfrey Ng'anga owns 1,500 chickens and six cows. One of Kenya's many smallholders, he sees the power of the European market as a threat to his livelihood.

"They should be buying our produce - eggs, milk and poultry. But their technology is very good and they can sell their produce much cheaper than we call sell ours," he said.

Oppostion to EPA deal

Supporters of the EPA say it will be beneficial for all sides. "EPA is a true partnership that forces EAC integration as well as providing better frameworks to attract foreign investment" claimed an EU promotional video produced for Kenya in 2013.

But there was strong resistance to the EPA in Kenya. The worry was the Kenyan horticulture - the cultivation of fruit, vegetables and nuts - would be unable to compete with subsidized produce from the EU.

"If you look at the demands that the EU has placed on the EAC - I don't see them handling what the EU has demanded, especially when you look at the liberalization, for instance, of 82.6 percent. That means you are effectively eliminating import tariffs over the next 15 years," he added..

The 82.6 percent refers to the share of the market that is to be opened up to EU exports.

When Kenya refused to sign the EPA, the EU flexed its muscles and imposed duties of between eight and a half and 30 percent on Kenyan cut flowers - one of the country's major exports - as well as on Kenyan coffee, tea and tinned pineapple.

It was blackmail as some Kenyans observed bitterly. But that did not lessen the impact. A few weeks later the Kenyan government signed the EPA. Many have criticized the EU's heavy-handed tactics, including the German government's Africa Commissioner, Günter Nooke, who suggested that it was counter-productive.

"We transfer a lot of taxpayers' money to Africa in the shape of development programs. One shouldn't set out to demolish with trade talks that which we in the development ministry are trying to help create," he said in an apparent reference to sustained economic growth in Kenya.

Economists at the United Nations have also voiced criticism of the EPA, saying it is more of a threat than an opportunity for the East Africans.